Silver Elephant Mining Corp. — Merger & Acquisition 2020

Nov 17, 2020

SALES AND PURCHASE AGREEMENT

Therefore, the purpose of this private document, an AGREEMENT FOR PURCHASE OF ALL CAPITAL QUOTAS IN THE LIMITED LIABILITY SOCIETY CERUSITA ANDINA LTDA., which with the formalities of law will have effects of public instrument, in accordance with the following clauses and conditions:

FIRST: (PARTIES)

Intervene and are contracting parties in the execution of this contract:

1.1 .- Cerusita Andina Ltda., a company lawfully incorporated in the country, by public deed No. 438/004 dated 19 July 2004, granted before Public Notary No. 27 of the Cochabamba Judicial District, Dr. Marlene Campos de Aguilar, with Commerce Registration No. 00109165, with NIT No. 1007553020, legally represented by its General Manager Mr. Hans-Henning Friedrich Adolf Stier, of legal age, legally competent, neighbor of this city, with Identity Card No. E-5887694 and commercial address in Cochabamba, Avenida de la Patria s/n, Commercial Building "BRISA DEL SUR ", Planta Baja, suites H4 / H5, accrediting representation with the special, broad and sufficient Power No. 128 / 2017, granted on March 24, 2017 before Public Notary No. 45, First Class of this Cochabamba Judicial District, Dr. Lenka Orellana de Bustamante, which for the purposes of this contract will be referred as "Cerusita Andina". ”.

1.2.- Sebald Alfred Bühler, with foreign certificate No. E-0014709, divorced, domiciled in Cochabamba, Calle Buenos Aires No. 520, owner of 80% of the capital quotas in Cerusita Andina;

1.3.- Hans-Henning Friedrich Adolf Stier, with foreign certificate No. E-5887694, divorced, domiciled in Cochabamba Calle Buenos Aires 520, owner of 15% of the capital quotas in Cerusita Andina;

1.4.- Carlos Villegas Vidaurre, with identity card No.1329954-1V, married, domiciled in Cochabamba, Avenida Dominic/Calle Claure Condominio "Juan Pablo II”,owner of 5% of capital quotas in Cerusita Andina;

For the purposes of this contract, Sebald Alfred Bohler, Hans-Henning Friedrich Adolf Stier and Carlos Villegas Vidaurre will be collectively referred to as the "Partners of Cerusita Andina". ”.

1.5.- Illumina Silver Mining Corp., a corporation legally established under the laws of British Columbia, Canada, domiciled in Suite 1610-400, Granville Street, Vancouver. BC V6C 1T2, Canada, Phone +1 (604) 569-3661, represented by Ms. Irina Plavutska, according to Resolution Dated August 26, 2020, which for the purposes of this contract will be referred to as“ Illumina ”.

Illumina, along with Cerusita Andina, and the Partners of Cerusita Andina will be referred to as the "Parties" and each one as "Party"

SECOND: (BINDING AND MUTUAL UNDERSTANDING AGREEMENT ON BASIC TERMS AND CONDITIONS)

The purpose of this agreement is to establish the conditions for the acquisition of all capital quotas in Cerusita Andina from the Partners of Cerusita Andina by Illumina. Consequently, this Sales and Purchase Agreement of Capital Quotas of a commercial company (the "Sale Agreement") is intended to establish a binding and mutual agreement, as well as our understanding of the basic terms and conditions under which Illumina will acquire (the "Operation Of Acquisition") all capital quotas of Cerusita Andina (the "Quotas of Cerusita Andina ”). All terms and provisions set out herein shall be binding on the Parties

THIRD: (CONDITIONS FOR THE ACQUISITION TRANSACTION) The consideration for Acquisition Transaction includes

• (i) within one business day of the execution of this Agreement and upon verifying the legal status of Cerusita Andina, Cerusita Andina Partner Quotas, and the legal status of mineral claims set out in Schedule “A”, Illumina shall pay to the Cerusita Andina Partners, a deposit of US$300,000 (the “Deposit”).

• (ii) remainder payment (Remainder payment) of US$6,500,000 (Six Million Five Hundred Thousand 00/100 US Dollars) minus any outstanding, duly proven and backed up, liabilities of Cerusita Andina (including, but not limited to, any pensions, taxes, royalties and other outstanding accounts payable by Cerusita Andina) and minus the Deposit. Remainder payment is paid in cash over one year period in twelve equal monthly installment, to be paid within the first five days of each month, starting March 1, 2021. Such payments will be made through wire transfers to the bank accounts that will be indicated to Illumina by Cerusita Partners before March 1[st] 2021. In case, by any reason, Illumina cease paying to the Cerusita Partners for two months in a row, it will be understood that it has desisted to continue with the purchase, or if communicates to Cerusita Partners its intention to terminate the Sales Purchase Agreement, then in such event all payments made up until such date, including the Deposit, will be consolidated on behalf of the Cerusita Partners y this agreement will be legally terminated, without any mutual obligation among the Parties, except the obligation of Illumina to return to Cerusita Andina all technical and financial information received from Cerusita Andina and from Cerusita Andina partners including what was obtained during the studies of the mineral deposit. At any time, from 1 March 2020, Illumina may decide to advance the payment of outstanding dues in order to complete the Remaining Payment within a shorter period.

Once completed and upon receiving the full Remainder payment by Cerusita Andina Partners, Cerusita Andina and Cerusita Andina Partners, within five working days, shall promptly transfer all the Cerusita Andina Capital Quotas to Illumina and/or to the person it may appoint in order to not to incur the provisions of Article 210 of the Bolivian Commercial Code (a limited liability company requires a minimum of two partners) .

FOURTH: (REPRESENTATIONS AND WARRANTIES OF CERUSITA ANDINA)

Cerusita Andina and the Cerusita Andina Partners represent, warrant and covenant to Illumina, on a joint and several basis, that:

• (a) this SPA has been duly executed and delivered by the Cerusita Andina Partners and constitutes a legal, valid and binding obligation of the Cerusita Andina Partners enforceable against each of them in accordance with its terms,

• (b) Cerusita Andina is validly existing and in good standing under all applicable laws;

• (c) Cerusita Andina has a social capital consisting of 19,380 of Cerusita Andina Quotas, all of which are owned by the Cerusita Andina Partners, all as set out in Schedule “B” hereto. There are no outstanding options or purchase warrants to acquire Cerusita Andina Quotas currently outstanding. The Cerusita Andina Quotas referred to in this paragraph, are the only issued securities of Cerusita Andina as at the date hereof and there are currently no other securities or agreements which could result in the issuance of Cerusita Andina Quotas or other securities of Cerusita Andina ;

• (d) all of the Cerusita Andina Partners have executed this SPA and agreed to the terms of the Acquisition Transaction and will take all necessary or prudent action to consummate the Acquisition Transaction in good faith;

• (e) Each individual Cerusita Andina Partner agrees to waive any preferential rights he might have to purchase the Cerusita Andina Quota from other Cerusita Andina Partners, in order for Illumina to complete Acquisition Transaction.

• (f) Cerusita Andina is the legal and beneficial owner of those assets set out in Schedule “A” hereto, and all of Cerusita Andina ’s assets are accurately listed in Schedule “A” hereto;

• (g) information provided, or to be provided, by Cerusita Andina and by the Cerusita Andina Partners to Illumina has been, is, and will be supplied in good faith in an accurate and correct manner in all material respects and such information constitutes full, accurate and complete disclosure. However, Cerusita Andina Partners are not responsible of the accuracy and exactitude of the technical and geological information supplied and that will be supplied, in good faith to Illumina, and

• (h) there are no actions, suits or legal proceedings in existence or pending or threatened affecting or that could affect Cerusita Andina, any of its assets or the Acquisition Transaction.

FIFTH: (DUE DILIGENCE AND ACCESS)

Cerusita Andina and the Cerusita Andina Partners shall provide Illumina and its representatives and advisors complete access to areas in Scheduled A, its facilities, technology, books and records and shall cause its employees, accountants, and other representatives to cooperate fully with such other Party in connection with such due diligence and access.

SIXTH: (STANDSTILL)

Cerusita Andina and the Cerusita Andina Partners hereby agree from the date hereof until the Completion of Acquisition Transaction that:

• (a) it shall direct and cause each of its officers, directors, employees, representatives, advisors, and agents and other related/affiliated/associated parties to: (i) immediately cease and cause to be terminated any solicitation, encouragement, activity, discussion, site visits, information sharing or negotiation with any parties that may be ongoing with respect to any existing or potential other transaction involving Cerusita Andina and/or its assets (an “ Alternative Transaction ”); and (ii) to act in good faith at all times with a view of completing the Acquisition Transaction;

• (b) it shall not authorize or permit any of its officers, directors, employees, representatives, advisors or agents or its subsidiaries, directly or indirectly, to enter into, agree, approve or recommend any Alternative Transaction or potential Alternative Transaction; and

• (c) it shall direct and cause each of its officers, directors, employees, representatives, advisors, and agents and other related/affiliated/associated parties to not take any action which may be detrimental to the Acquisition Transaction.

SEVENTH: (BUSINESS CONDUCT)

From the date of the acceptance of this SPA until the earlier of the time of completion of the Acquisition Transaction, Cerusita Andina and the Cerusita Andina Partners shall:

• (a) not alter its capital structure, make any payments or expenditures, take any action outside of the normal course of business, or complete, negotiate or enter into any agreement or transaction whatsoever without the prior written approval of Illumina; and

• (b) provide Illumina access to areas in schedule A to conduct exploration activities, fully cooperate with Illumina with a view towards consummating the Acquisition Transaction as expeditiously as possible.

• (c) lawfully maintain the mining rights of the mining areas in Schedule A. Cerusita Andina Partners must comply with all the requirements and procedures established by Bolivian law for the adequacy of the ATEs mining areas in Schedule A by taking all legal actions and resources for the satisfactory completion of the adequacy of the aforementioned mining areas belong to the Cerusita Andina.

• (d) deliver to Illumina copies of all the communications or notifications received related to the rights over the mining areas belong to Cerusita Andina.

• (e) Will administrate, on a routinely, prudent and without significative changes manner, the current mining operation at the Sunawayo mine, until the transfer of capital quotas, scope of this agreement is completed.

In the term of one month from the signature of this sale and purchase agreement, the Cerusita Andina Partners will pay the severance owed to their employees and will cover any severance pending obligation that may exist at the date of the last payment for the transference of the capital quotas

• (f) In the event that, once the Remaining Payment has been completed and after the transfer of the Capital Quotas of Cerusita Andina, any evident debt or obligation of Cerusita arises, incurred prior to the transfer of the capital quotas, the Partners of Cerusita Andina will irrevocably assume the payment of such obligation.

EIGHT: (PUBLICITY AND CONFIDENTIALITY)

Cerusita Andina and the Cerusita Andina Partners shall not disclose the Acquisition Transaction or any information related thereto to any other person or entity.

NINETH: (ENTIRE AGREEMENT)

This agreement embodies the entire agreement and understanding of the Parties and supersedes all prior agreements or understandings with respect to the subject matter of this letter.

TENTH: (COUNTERPARTIES, SUSCRIPTION)

This Sales Purchase Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Sales Purchase Agreement.

ELEVENTH: (CHOICE OF LAW)

The Parties declare that for all purposes, consequences and emergencies, this contract is subject to the laws and other legal provisions of the Plurinational State of Bolivia.

TWELVETH: (DISPUTE RESOLUTION)

If differences that may arise between the Parties, with respect to the interpretation and/or fulfillment of this contract, which could not be resolved directly between the Parties, will be considered as disputes, which must be resolved in a friendly manner, subject to the provisions of the laws of Bolivia and in accordance with the rules of the Arbitration and Conciliation Center of the National Chamber of Commerce of Bolivia. The cost of arbitration will be paid by both parties, in the event of a tie. If the arbitral decision is in favor of one of the parties, the lost party shall pay all costs and costs of the arbitration. The arbitral decision shall be unappealable and enforceable by both parties. The filing of a dispute shall not be grounds for the interruption of the parties' other obligations.

THIRDTEENTH: (DOCUMENTS ATTACHED TO THE CONTRACT)

The following documents are part of this contract, in order of priority: (i) This Agreement and (ii) Annexes A and B.

FOURTEENTH: (DEFINITE TRANSACTION)

This document has the validity of a final transaction as acknowledged by Article 949 of the Bolivian Civil Code (valid agreements between parties have the value of a definitive legal transaction) .

FIFTEENTH: (ACCEPTANCE AND CONFORMITY)

The executing Parties express our full agreement and acceptance with the preceding clauses of this contract, committing ourselves to a faithful and strict compliance and in faith of this we subscribe in two copies of the same wording and validity, on this twentyfive days in August of the year two thousand twenty. This agreement is also executed by Mrs Rosario Portal de Villegas, with identity card No. 1420723 LP, wife of Mr. Carlos Villegas Vidaurre, in sign of her acceptance and conformity to this Sales Purchase Agreement.

If you agree to proceed on this basis, sign and date this document in the space provided below and return a signed copy to the undersigned by August 25, 2020.

IllumIrina Plavutska ina Silver Mining Corp:

"Irina Plavutska"

Irina Plavutska

Cerusita Andina Ltda:

"Hans-Henning Adolf Friedrich Stier"

Hans-Henning Adolf Friedrich Stier

Cerusita Andina Partners:

"Sebald Alfred Bühler "

Sebald Alfred Bühler

"Hans-Henning Adolf Friedrich Stier"

Hans-Henning Adolf Friedrich Stier

"Carlos Villegas Vidaurre "

Carlos Villegas Vidaurre

"Rosario Portal de Villegas"

Rosario Portal de Villegas

ANNEX “A”

ASSETS OF CERUSITA ANDINA LTDA. (CAL)

MS- LINK		PADRON	CONCESSION	CUADRICULA	HECTARES	TITLE HOLDER
12063		507- 02529	SUNAWAYO	106	2.650	CAL
13635		507- 02541	SUNAWAYO-II	70	1.750	CAL
14624		507- 03199	SUNAWAYO- III	60	1.500	CAL
14623		507- 03198	SUNAWAYO- VI	2	50	CAL
			TOTAL:	238	5.950	CAL

In addition, there are other assets whose list will be provided within five days of the date of this Agreement by Cerusita Andina and will be included into this contract.

ANNEX “B”

PARTNERS OF CERUSITA ANDINA LTDA. (CAL)

PARTNER	POSITION	PERCENTAGE
Sebald Alfred Buhler	Director - Partner President	80 %
Hans H. Friedrich Adolf Stier	General Director	15 %
Carlos Villegas	Mine Manager	5 %